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2023 (5) TMI 265 - SC - CustomsBurden of proof in case of Smuggling Activity - Right of an accused under the Customs Act, 1962 to settle the dispute as per provisions contained under chapter XIV A of the Customs Act - personal liberty under Article 21 of the Constitution of India - Smuggling of high value goods - watches - baggage rules - burden to prove - conflict between the two sets of High Court judgments - HELD THAT:- Section 123 of the Customs Act 1962, states that if an accused is caught by the authorities in the act of smuggling goods, the burden of proof, which originally vests with the prosecution, is reversed, and the same is transferred from the prosecution to the defense. In simpler terms, this would mean that in such cases, it is the accused who is tasked with proving his innocence, rather than the prosecution proving the accused person’s guilt - This discharge of burden of proof, in our opinion, can only happen in cases where there is a reasonable possibility of the accused being innocent. In the present case at hand, the petitioner herein was caught with the impugned goods within the customs area. In such a scenario, where the impugned goods are found on the person of the accused and within the customs area, any chance of the accused being innocent becomes an impossibility, since the illegal act is caught in the heat of the crime. Since the discharge of burden proof, rather, the question of burden of proof itself becomes redundant in cases of seizures within the customs area, by default, the provision that mandates such a task also becomes redundant - While the conflict between the two sets of High Court judgments has been brought to an end, certain other issues flowing from the said interpretation, in our opinion, must also be clarified. Judgment rendered by the High Court of Bombay in the SURESH L. RAHEJA [2010 (10) TMI 726 - BOMBAY HIGH COURT] expounds the correction position of law, and we concur and approve the same. Whether any person who importing the impugned goods at the instance of another person, is a smuggler, and as such, the Settlement Commission cannot be approached in such cases? - HELD THAT:- In the case of Tata Teleservices (Maharashtra) Ltd vs Union Of India [2005 (7) TMI 113 - HIGH COURT OF JUDICATURE AT BOMBAY], the High Court of Judicature at Bombay, while deciding on a similar issue,by relying on the Constitution Bench judgment of this court in the case of LILA VATI BAI VERSUS STATE OF BOMBAY [1957 (3) TMI 58 - SUPREME COURT], gave the phrase “or otherwise”, as mentioned in Section 127 B of the Act, an expansive interpretation, and held that the jurisdiction of the Settlement Commission can be invoked by a person who has committed smuggling, fraud or deliberate mis-declaration - Further, the abovementioned judgment of the Bombay high court was impugned in the Supreme Court by way of an appeal, and the same was dismissed by this Court vide order dated 03.08.2011, further fortifying the judgment of the High Court. The contention of the petitioner that any person who importing the impugned goods at the instance of another person, is a smuggler, and as such, the Settlement Commission cannot be approached in such cases, is rejected. Since a show cause notice has already been issued, no direction is that regard is warranted. If an application of settlement is filed by the petitioner, the same shall be dealt with by the Settlement Commission on its own merits and in accordance with law and the procedure prescribed u/s 127H of the Customs Act. However, we deem it appropriate to observe that, if at all, the Settlement Commission would deem fit, it can always seek further report from the “Commission (Investigation)” appointed within the Settlement Commission even after issuance of the show cause notice for this one time opportunity of settlement - petition disposed off. Whether a settlement remedy under Section 127B of the Customs Act, 1962, would be available for the seized goods, which are specified under Section 123 of the said Act - in the attending facts, the exercise of powers under Article 32 of the Constitution of India be appropriate? - HELD THAT:- The scheme of the act involves the imposition of customs duty, confiscation of goods and consequences of skirting or attempting to skirt the same in the form of varied penal consequences, including imprisonment. This follows the purpose of the Act, as noted by this Court in Ambalal [2010 (12) TMI 16 - SUPREME COURT], which is to sternly and expeditiously deal with goods smuggled into India in contravention of the prohibitions within the law. On a plain reading of Sections 127B and 123, it is evident that the proviso to Section 127B(1) specifies certain categories of goods are barred from the jurisdiction of the settlement commission. These include goods mentioned under Section 123 and goods relating to the NDPS Act. Therefore, recourse under Section 127B cannot be made if any of the above goods are involved 23.Even without any controversy about the origin of the goods, Section 127B of the Act would not apply for settlement in respect of the goods enumerated under Section 123 as this goes against the statutory scheme of penal consequences for committing certain offences such as for evading duty, as alleged in the present case, under Section 135 - Hence, the contention of the Petitioner that the legislative intent is for settlement of all cases cannot be accepted. In the present case, the recovery from the Petitioner was on crossing the green channel at the Delhi airport on 05.10.2022, wherein the officers of the Investigating Agency apprehended him with dutiable goods, including watches of admitted foreign origin. Watches is one of the categories of goods mentioned in Section 123 of the Act. Since there is a recovery of goods to which Section 123 applies, the same is a bar for the Petitioner to approach the Settlement Commission. The matter is fit to be remitted to the adjudicating authorities to take appropriate action, as per law. Petitions disposed off.
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